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“Ivory Tower Unswayed by Crashing Economy”

- March 9, 2009

This news article by Patricia Cohen discusses how the recent economic crisis has had a huge effect on the views of policymakers but has not resulted in much change among academic economists:

Since [the stock market crash] the former Federal Reserve chairman Alan Greenspan has admitted that he was shocked to discover a flaw in the free market model and has even begun talking about temporarily nationalizing some banks. A Newsweek cover last month declared, “We Are All Socialists Now.” And at the latest annual meeting of the American Economic Association, Janet Yellen, president of the Federal Reserve Bank of San Francisco, said, “The new enthusiasm for fiscal stimulus, and particularly government spending, represents a huge evolution in mainstream thinking.”

Yet prominent economics professors say their academic discipline isn’t shifting nearly as much as some people might think. . . . The financial crash happened very quickly while “things in academia change very, very slowly,” said David Card, a leading labor economist at the University of California, Berkeley. . . . Given the short time span since the crisis began, no one expects large curriculum changes yet. But in addition to Berkeley and the University of Texas, professors at a number of departments including those at the University of Chicago, Harvard, Yale and Stanford, say they are unaware of any plans to reassess their curriculums and reading lists, or to rethink the way introductory courses are organized. . . .

I don’t know what’s going on in econ here at Columbia–that dept is on the 10th floor, and my office is far far away on the 7th floor–but I wonder whether some of this is simply that faculty major universities have not yet been hit hard by the recession. I’m sure it can happen and maybe will, but so far I’ve heard about some hiring freezes and pay freezes but not real hardship: Columbia and other places continue to pay full-time faculty, adjuncts, and grad students, continue with research projects, and so forth. I haven’t heard of a lot of classes being canceled anywhere. When I taught at Berkeley, they gave us all a 3% pay cut one year, and nobody seems to be talking about that.

Again, I’m sure there are some places that are struggling, and I don’t want to minimize the difficulty that many students have in paying tuition, but to return to the original point about the classes and doctrines taught by academic economists: maybe it’s only when these folks feel the pain themselves that they’ll really be motivated to change.

As the article pointed out, academic Marxism has lasted a long time in the face of what would (to a naive observer such as myself) appear to be countervailing evidence, so there’s no reason to think that other refuted doctrines would disappear, especially in an environment where the people teaching these classes continue to be paid well.